Relates to the tax credits for the rehabilitation of historic properties

2 Co-sponsors

• David Carlucci
• Mark Grisanti

BILL NUMBER:S1797B

Title of bill

An act to amend the tax law, in relation to the tax credits for the rehabilitation of historic properties

Purpose or general idea of bill

To exempt the tax credit for rehabilitation of historic properties from the temporary deferral of tax credits found in the 2010-2011 Revenue Bill, S.6610C/A.9710D.

Summary of specific provisions

Section 1 removes the tax credit for rehabilitation of historic properties from the list of tax credits subject to deferral pursuant to part Y of S.6610C/A.9710D.

Section 2 sets forth the effective date for the first of January of the next succeeding year after it has become a law.

Justification

This bill makes whole the Historic Rehabilitation Tax Credit (HRTC), specifically the credit for the rehabilitation of commercial properties, to assure it is restored in 2012 to serve as a vital tool for economic development in New York State by exempting it from the final year of the deferral imposed in 2010 on certain state tax credits.

The HRTC has been significantly affected by the deferral program, resulting in delayed or abandoned rehabilitation projects in communities across New York State, and the loss of out-of-state investment to fully-functioning rehabilitation tax credit programs in other states. Developer and investor confidence in the recently established HRTC has been severely eroded, further impeding its use.

The deferral threshold of $2 million has effectively exempted many of the thirty credits subject to deferral from significant impacts; however, this threshold impacts the HRTC in unique ways. It prevents large rehabilitation projects from fully utilizing the HRTC program. Such projects generate the largest and most sustained construction employment and post-construction jobs and have the most transformative economic and community renewal value for urban areas. Furthermore, it prevents national investors from capitalizing multiple rehabilitation projects in New York. This has prevented numerous small and medium scale projects in communities throughout the state from securing financing necessary to start reconstruction.

The HRTC program was drafted to promote economic growth and community redevelopment in a fiscally responsible manner. The imposition of a deferral upon the commercial program has significantly weakened the

program as an economic tool. With a program sunset in 2014, restoring program integrity in 2012 will provide developers and municipal offices across New York State with the opportunity to resume project development efforts, which will catalyze economic activity and promote environmental sustainability in communities across the state well in advance of credit issuance by New York State.

Prior legislative history

08/11/2010 - Referred to Ways and Means (Hoyt)

Fiscal implications

Because the deferral has severely impeded use of the Historic Rehabilitation Tax Credit program, the original fiscal impacts calculated for this program have not been realized. Projects completed in 2011 will still be subject to the deferral. Only projects placed in service after January 1, 2013 with credit value in excess of $2 million will generate a fiscal impact from this change. Estimated fiscal savings from this program due to the deferral program in 2010 were calculated by the Preservation League of New York State to be no more than $1.8 million in savings across New York State.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.